Tag Archives: Economics

By K. Kıvanç Karaman, Sevket Pamuk and Seçil Yıldırım-Karaman This article first appeared at Vox There is a notable lack of long-run analyses of monetary systems and their stability. This column addresses this gap by looking at the monetary systems of major European states between 1300 and 1914. The evidence collected suggests that, despite many switches between standards and systems, fiscal capacity and political regimes ultimately shaped patterns of monetary stability. Theories of monetary...

By K. Kıvanç Karaman, Sevket Pamuk and Seçil Yıldırım-Karaman This article first appeared at Vox There is a notable lack of long-run analyses of monetary systems and their stability. This column addresses this gap by looking at the monetary systems of major European states between 1300 and 1914. The evidence collected suggests that, despite many switches between standards and systems, fiscal capacity and political regimes ultimately shaped patterns of monetary stability. Theories of monetary...

Economics is a science of thinking in terms of models joined to the art of choosing models which are relevant to the contemporary world. It is compelled to be this, because, unlike the typical natural science, the material to which it is applied is, in too many respects, not homogeneous through time. The object of a model is to segregate the semi-permanent or relatively constant factors from those which are transitory or fluctuating so as to develop a logical way of thinking...

Keeping the dream alive For me, the study of asymmetric information was a very first step toward the realization of a dream. That dream was the development of a behavioral macroeconomics in the original spirit of Keynes’ General Theory. Macroeconomics would then no longer suffer from the ad hockery of the neoclassical synthesis, which had over-ridden the emphasis in The General Theory on the role of psychological and sociological factors, such as cognitive...

Guest post by Jeff Mosenkis of Innovations for Poverty Action. IPA is offering funding for research on ideas about “Peace and Recovery” very broadly defined – looking to test new ideas for counteracting violence (including state and electoral), helping refugees, recovery from humanitarian crises, or countering extremism, and is accepting proposals from Ph.D. students. (The photo above is from research in a Colombian FARC demobilization camp). Expressions of Interest are due NEXT FRIDAY...

But these more recent writers like their predecessors were still dealing with a system in which the amount of the factors employed was given and the other relevant facts were known more or less for certain … At any given time facts and expectations were assumed to be given in a definite and calculable form … The calculus of probability, tho mention of it was kept in the background, was supposed to be capable of reducing uncertainty to the same calculable status as that of...

You would think, wouldn't you, that an "Alternative Brexit Economic Analysis" by four highly experienced and qualified economists would be a rigorous exercise in economic forecasting, supported by excellent econometrics and with care taken to avoid confirmation and selection bias?  A new paper from the Brexit-supporting thinktank Economists for Free Trade critiques the Government's recent forecast that Brexit would cause a GDP loss of between 2 and 8 percent over 15 years, with the...

Economics — a science with wacky views of human behaviour​ There is something about the way economists construct their models nowadays that obviously doesn’t sit right. The one-sided, almost religious, insistence on axiomatic-deductivist modelling as the only scientific activity worthy of pursuing in economics still has not given way to methodological pluralism based on ontological considerations (rather than formalistic tractability). In their search for...

Science and the quest for truth In my view, scientific theories are not to be considered ‘true’ or ‘false.’ In constructing such a theory, we are not trying to get at the truth, or even to approximate to it: rather, we are trying to organize our thoughts and observations in a useful manner. Robert Aumann What a handy view of science. How reassuring for all of you who have always thought that believing in the tooth fairy make you understand what happens to...

Marx and Keynes on the contradictions of capitalism Each capitalist, Marx noted, has an ambiguous relation to the workers. On the one hand, she wants the workers she employs to have low wages, since that makes for high profits. On the other hand, she wants all other workers to have high wages, since that makes for high demand for her products. Although it is possible for any one capitalist to have both desires satisfied, it is logically impossible for this...